Federal Reserve Free-for-All; Audit the Fed Bill Passes House

Monetary issues are coming to thefore like never before. Even whileSwiss voters will decide fairly soonwhether to institute a universal basic income—distributed to both the employedand the unemployed without means-testing—the Council on Foreign Relations (CFR),oddly, is chiming in on this concept of creating aneconomic “floor.”

The CFR and its flagship journal ForeignAffairs are the very essence of monopoly capitalism.The CFR has always championed the current“international system” that trans-nationalists treatas if it’s the Holy Grail.

But the players behind that biasedsystem mainly consist ofwhat the late financial author Ferdinand Lundbergcalled “themoney bund.” That craven cliquerigs the tax code and the monetarysystem to maintain a trans-generationaldeath grip on “allthings financial,” cloaked with claims of “merit.”

The CFR was founded in 1921,backed by the Morgans, Rockefellers,Schiffs and others withgilded surnames. Their unspoken linchpin of worldcontrol is the creation of money—its volume, itschief recipients and the terms of its creation.

Money comes into existence as debt. The FederalReserve, in concert with the commercialbanks, makes money happen on the condition thatthe United States Treasury prints the stuff, but the moneymust be handed over to the Fed, which funnels itback to the nation (in exchange for bonds) carryinginterest. The print job costs the Fed just a fewcents per note—regardless of the note’s denomination.

The corresponding harness placed on the enslavedmasses includes the federal income tax,which services the annual interest payments on thenational debt that surpasses $400 billion per year.So it’s no accident the infamous National Debt Clock hangs above the Internal Revenue Service entrance in midtownManhattan.

Suddenly, the CFR wants the hoi polloi to receive moneydirectly from the Federal Reserve, notas a loan, but as a grant, with no apparent stringsattached.

Brown University academics Mark Blyth andEric Lonegran trotted out their direct-paymentsproposal in the September-October issue of ForeignAffairs. Their article, entitled“Print Less but Transfer More: Why CentralBanks Should Give Money Directly to the People,”contains—it seems—some valid points.

To wit, they wrote:

Today, most economists agree that like Japanin the late 1990s, the global economy is sufferingfrom insufficient spending, a problem that stemsfrom a larger failure of governance. Central banks,including the U.S. Federal Reserve, have taken aggressiveaction, consistently loweringinterest rates. . . . They havealso pumped trillions of dollars’worth of new money into the financialsystem. Yet such policieshave only fed a damaging cycle ofbooms and busts . . . and now economicgrowth is stagnating whileinequality gets worse.

But pumping trillions into “thefinancial system” means themoney enters the upper economicloop where wagering and shadowy deals rule, andlittle is done for Main Street. At the local level, inthe lower loop, there is a money drought.

Thus, in this two-loop system, Main Street is sufferingfrom a tremendous lack of purchasingpower versus the huge inventory of goods for saleand the total sum of the prices of those goods.

The CFR authors added:

It’s well past time, then, for U.S. policymakers—as well as their counterparts in other developedcountries—to consider a version of [late economist Milton] Friedman’s “helicopterdrops.” In the short term, such cash transferscould jump-start the economy. Over the longterm, they could reduce dependence on thebanking system for growth and reverse the trendof rising inequality.

The authors aren’t wrong in saying that theeconomy needs more spending strength, but whatthey don’t say is that unless monetary creation isshifted away from private banks, central or commercial,then more debt is incurred whenevermoney is created to deliver directly to citizens. Atthis early juncture, one wonders whether the CFRis trying to muddy the waters and prevent propermonetary reform.

Yet such monetary reform is the first step—wherein money creation would be installed in theU.S. Treasury. There, public United States notes,not private Federal Reserve notes, would be directlycreated by the government free of interest.Then, citizen payments in a basic-income schemecould be beneficial.

Past monetary visionaries, such as Clifford H. Douglas and Gorham B. Munson, saw the problem: If the money in circulation only comes from jobs, the costs that employers incur to pay employees end up in the final price tag, raising prices. And money from loans demands repayment with interest, thereby removing more money than was first introduced.

Faced with this paradox, Douglas, a British engineer,and Munson, an American academic activist,separately promoted “social credit,” basedon the premise that an adequate sum of newmoney must regularly enter the economy, totallyseparate from the employment and loan systems.

Unlike the CFR proposal, social credit wouldend the private concession on money and creditcreation, switch that creation to an interest-freefooting and provide a regular citizen dividend to allpeople to supplement work income—with the volumeof the sovereign money gauged to real productiondata. That way, you can’t have too muchmoney chasing too-few goods (inflation)—nor too little money (deflation).

Audit the Fed Bill Passes the House

• 333 out of 435 congresspersons vote to check Fed’s books

By Mark Anderson

WASHINGTON, D.C.—Scores of issuesare squeezing Congress this month, asall 435 House members nervouslywatch the calendar to make re-electionplans. Rather surprisingly, Congress passedlegislation to audit the Federal Reserve—the privatelyowned and controlled central bank that haspossessed America’s monetary creation since 1913—by a vote of 333-92.

This good news began the evening of September 16 when Representative Mark Meadows (R-N.C.) revived H.R. 24, the Federal Reserve Transparency Act of 2013.

Meadows and the others recalled that the same bill in the previous Congress passed the House by a similarly wide margin, 327 to 98.

As Massie noted, the shadowy Fed needs to be just as accountable as all other federal agencies, but it isn’t.

Critics maintain that the insular Fed hides massive loan-and-bailout deals with European banks behind a veil of secrecy, conceals its monetary policy—and has nearly depleted the nation’s purchasing power on “Main Street” via a deflationary spiral. Yet that doesn’t fully reveal the treachery that occurs when money creation is privatized, with perpetual punishing interest loaded onto the backs of taxpayers across the generations.

Rep. Elijah Cummings (D-Md.) briefly counteredthat he feels partial audits have revealed sufficientinformation about the Fed’s workings to satisfyCongress. Cummings did add that H.R. 24 wouldmake Congress privy to the private correspondencewithin the Fed on the touchy matter of monetarypolicy. He thinks that’s a bad thing, but that correspondence could reveal a great deal of useful information.

Monetary policy is molded at the Federal Open MarketCommittee, or FOMC, meetings, to which members of Congressand even the president are not invited. Basicannouncements of FOMC meetings andgeneral recorded minutes of the proceedings aremade public. However, much is not known about this most crucial of Fed operations.

The question that this newspaper has always raised iswhether an audit will evolve into ending the Fed altogether. A deep audit is fine, but it’s not enough.

S. 209, the Senate version to more deeply auditthe Fed, is also alive as the 113th Congress draws to a close late this year.

Time is of the essence. AMERICAN FREE PRESS readers should applystrong pressure on both houses of Congress to revivethis movement to make the Fed Reserve history. Call Capitol Hill at 202-224-3121 or 225-3121.

AFP Roving Editor Mark Anderson is a veteran reporter who covers the annual Bilderberg meetings and is chairman of AFP’s new America First Action Committee, designed to involve AFP readers in focusing intensely on Congress to enact key changes, including monetary reform and a pullback of the warfare state. He and his wife Angie often work together on news projects. Write to Mark at [email protected]

It is important to note that whether currency is printed (monetary expansion) under the auspices of Congress or the Federal Reserve, inflation is created. There needs to be a check in place to create popular (public) incentive to increase prudent productivity (GDP/GPI) and reduce national (sovereign) debt, i.e., phase out bureaucratic welfare/subsidy programs and institutions while phasing in a minimum income.

A GDP/GPI::Debt Index is a take-off from Robert Shiller’s ‘Trill’ concept and may be particularly attractive to the fiscal-minded (balance the budget) and liquidity is universally desirable by everyday consumers and everyday businesses. Vested interests that profit from the existing system may disagree (campaign fund losses, government freebies to garner votes, subsidized businesses, bureaucratic job elimination, other gamers of the system, etc.).

A legal framework for a GDP::Debt Indexed Liquidity Complement (Indexed minimum income, Indexed Basic Income, Indexed NIT, etc.) is one way to describe this. Hayek, Rhys-Williams, Friedman and other notable economists endorse a form of minimum income (NIT, BI, etc.) for the Adam Smith ‘necessaries’ or FA Hayek ‘first order’ minimum income. Hayek notes in ‘Road to Serfdom’ that one must be careful how it is implemented. First order needs are defined, by Hayek, as necessary funding for each individual to have a minimum level of food, clothing, shelter and maintaining fitness for work (aka health care). This is consistent with Friedman and Rhys-Williams.

A House or Senate Bill can be created by Congress as a framework (without having to define exact tax reforms, exact welfare/subsidy reforms, exact budget controls) and then Congress has a place to start to dig us out of our debt with a sane fiscal policy.

The above can be accomplished with or without the Federal Reserve. It may be wise to critically consider whether Congress or the Federal Reserve quasi-government agency is more responsible at printing money, as well as anybody under sun for that matter.

I do hope the HR.24/S.209 is brought to the Senate floor and passed. The public should know how its money is being used.

I hope more articles come out that finally get into the nitty gritty of the problem, kudos.